Posted January 2019
Canada – Cannabis: a pipe dream?
After the hype came the fall. Shares in Canadian cannabis companies have been on a tumultuous ride as of late. Since peaking in the days before the country’s legalisation of cannabis (17 October 2018), there has been a near-steady decline in many a company’s stock price. Read on
USA – Shares in Constellation Brands drop nearly 30 percent in 2018
Constellation Brands, which is the number three brewer in the US, saw its stock decline about 30 percent from its 30 April 2018 high of USD 236.62. At the end of December 2018, it stood at only USD 162.86. There are probably several explanations for Constellation’s sinking share price. But the main reason is the devastation taking place in the cannabis sector, which has pulled down the share price of Canopy Growth, in which it has a big stake. Read on
USA – Altria goes after vapers and stoners
Mad Money rules again. In December 2018, AB-InBev’s shareholder, the cigarette company Altria, paid USD 12.8 billion for a 35 percent stake in e-cig maker JUUL. This makes the San Francisco-based start-up worth USD 38 billion, more than other Silicon Valley start-ups, such as Airbnb, Pinterest, and Lyft. Many analysts thought the deal pricey, as JUUL’s turnover is estimated at only USD 2 billion. Read on
Canada – AB-InBev and pot firm Tilray to study cannabis drinks
So AB-InBev has jumped on the pot waggon too. AB-InBev and Canadian cannabis company Tilray have set up a USD 100 million joint venture to study cannabis-based beverages, the companies announced on 19 December 2018.
The partnership is limited to Canada, where full legalisation of cannabis beverages is slated for this year. The companies will make decisions about commercialising the products in the future only. In the meantime, the joint venture, in which both companies will invest USD 50 million each, will merely study non-alcoholic beverages containing THC, the psychoactive compound in marijuana, as well as CBD, the non-active compound. AB-InBev’s Canadian subsidiary, Labatt, will be involved in the Tilray partnership. Read on
France – Pernod Ricard under attack
The world’s number two drinks group, Pernod Ricard, is preparing for battle against the US investment fund, Elliott Management Corporation. Having gradually built up a stake of 2.5 percent – that’s a ticket of USD 1 billion – in Pernod Ricard, the activist investor launched its attack on 12 December 2018, calling Pernod Ricard’s governance “inadequate” and performance “inferior” to competitors such as Diageo. Read on
South Africa – Diageo sells sorghum brewer to Zimbabwe’s Delta Corp
Zimbabwe’ listed beer and beverage company, Delta Corp, in which AB-InBev is a major shareholder with a 38.2 percent stake, will buy Diageo’s South African sorghum beer-brewer, United National Breweries (UNB). The transaction, announced on 21 December 2018, will be Delta’s first acquisition in South Africa and its second outside Zimbabwe. Delta bought Zambia’s National Breweries, also a brewer of sorghum beer, in January 2018.
Financial details have not been disclosed. Diageo only said that sale proceeds are “not material”. Read on
USA – AB-InBev knows what women don’t want
The old enigma “women and beer” has been solved. Guess what, Marketing Men had got it wrong all along. Molly Hayes, AB-InBev’s global director of innovation/insights, discussed a year-long research effort to understand how the female audience views and acts in the beer sector, during a session at The Market Research Event (TMRE) 2018, held in October 2018.
Belgium – AB-InBev’s bruising year
After the share price sag, the cut in dividends and the downgrading of its credit rating by Moody’s, you cannot say that AB-InBev had a jolly good year. But it was not all their fault. The Money Men, who ganged up on AB-InBev in the past quarter and told the world’s number one brewer to pay down debt pronto by cutting dividends or else, can be real hypocrites, sometimes. I could not help thinking that their show of furrowed brows and clenched teeth had a comic book quality to it. Fact is, the Money Men would have known all along that AB-InBev had no intention to reduce its debt pile quickly. Read on
USA – Brewers Association changes definition of what is a craft brewer
As has been expected, the Brewers Association’s board of directors has revised its craft brewer definition at its December 2018 meeting in Scottsdale, Arizona.
It now reads: An American craft brewer is a small and independent brewer.
As to the individual constituents of the definition, “small” implies an annual production of 6 million barrels of beer or less. “Independent” means that less than 25 percent of the craft brewery is owned or controlled (or equivalent economic interest) by a beverage alcohol industry member that is not itself a craft brewer. A “brewer” has a tax licence and makes beer. Read on
Portugal – Carlsberg hikes stake in Super Bock Group
Danish brewer Carlsberg has acquired 28.5 percent of the shares in Viacer, the controlling shareholder of Portuguese brewer Super Bock Group, which holds 56 percent of the shares in the company. This was announced on 13 December 2018. Carlsberg already directly owns 44 percent of the shares in the Super Bock Group. Following the transaction, Carlsberg’s direct and indirect ownership in the Super Bock Group rises to 60 percent. Read on
Australia – AB-InBev’s unit CUB moves to new much smaller headquarters
Australia’s major brewer, CUB, in December 2018, moved to new digs in Southbank, Melbourne, following the sale of its old Southbank headquarters to the state government for AUD 95.5 million (USD 77 million) in January 2018.
CUB has shrunk its new office presence by more than half after signing a ten-year lease covering 6,500 square metres at Freshwater Place in February 2018, it was reported. Read on
Belgium – European officials agree on ban of some single-use plastics
Disposable plastic items, such as straws and polystyrene cups, will be banned in the European Union by 2021, EU officials agreed on 19 December 2018, as they passed measures to cut plastic use in a bid to reduce marine litter. The proposed measures still need approval from EU member states and the EU parliament. Read on
Israel – Craft brewer Alexander is giving farmers hope
The Israeli-Palestinian conflict is one of the world’s ongoing tragedies. Over the past two years, the southern border area between Israel and Gaza has become a new conflict zone. Benefitting from the Mediterranean winds blowing eastwards, Palestinians have sent flaming kites and fire balloons across the border. In the past two months alone, more than 2,600 hectares of crops, mainly wheat, have been set on fire. This has devastated the lives of the farmers of Israel’s border towns and kibbutzim, who depend on their crops for their livelihood. Read on
Israel – Craft brewers persevere despite high taxes and low consumption
Three 13,000-year-old stone mortars found in a cave near Haifa may be the earliest known physical evidence of an ancient beermaking operation. But it does not mean that present-day Israel has a beer culture. Average beer consumption has hovered around 14 litres for many years. Until the microbrewery Dancing Camel opened in Tel Aviv in 2005, the only local beers available were “Goldstar” and “Maccabee” lagers. These days, you can find 20 commercial craft breweries dotted across the small country. However, all find it difficult to sell their beers, not least because the major brewers still enjoy a tight grip on the market. As a consequence, there have not been any craft brewery openings for a while. Read on